Polymarket replaces USDC.e with USDC‑backed token in V2 exchange

Polymarket announced that it will retire the bridged stablecoin USDC.e and introduce its own USDC‑backed token, Polymarket USD, as part of a V2 exchange overhaul designed to simplify order matching and align the platform with U.S. regulatory expectations [1].

Key takeaways

• Polymarket USD is a 1:1 USDC‑backed token that will replace USDC.e across the platform [2]
• The V2 exchange contracts add EIP‑1271 support, enabling smart‑contract wallets and trading bots to interact directly [1]
• The upgrade is expected to roll out over the next few weeks, with most users needing only a one‑time approval in the interface [2]
• The move follows Polymarket’s November CFTC approval to operate as an intermediated trading platform in the United States [1]

New collateral token and V2 exchange contracts

Polymarket’s upgrade centers on the launch of Polymarket USD, an internal collateral token fully backed 1:1 by USDC. By minting its own token, the platform reduces reliance on the bridge that underpinned USDC.e, giving it tighter control over settlement and lowering the technical risk associated with cross‑chain bridges. The transition will be handled automatically through the platform’s UI, requiring users only to grant a single approval for the migration.

Alongside the token swap, Polymarket is deploying “version 2” exchange contracts that streamline how orders are structured and matched. A notable addition is support for the Ethereum EIP‑1271 standard, which permits smart‑contract wallets—such as multisignature accounts and automated trading systems—to sign transactions. This enhancement broadens compatibility beyond traditional externally owned accounts, making it easier for developers, market makers, and institutional bots to connect to Polymarket’s API.

Regulatory backdrop and future outlook

The infrastructure overhaul follows Polymarket’s receipt of Commodity Futures Trading Commission (CFTC) approval in November, which cleared the way for the platform to operate as an intermediated trading venue in the United States. By moving away from a bridged stablecoin and modernizing its exchange layer, Polymarket aims to meet the stricter settlement and risk‑management standards expected by U.S. regulators.

Why it matters

Replacing USDC.e with a directly controlled, USDC‑backed token reduces bridge‑related risk and improves auditability—key factors for regulatory compliance and institutional confidence. The addition of EIP‑1271 support could attract more sophisticated trading participants, potentially deepening liquidity and tightening spreads on the prediction market. As Polymarket prepares to onboard U.S. brokers and customers through regulated venues, the V2 upgrade lays the technical foundation for a more compliant and developer‑friendly ecosystem. The rollout is slated for the coming weeks, with no exact launch date disclosed.